Building Trades

What Gives? Number of Stalled Construction Projects Grows

What Gives? Number of Stalled Construction Projects Grows

November 30, 2012
By Joe Maniscalco

The number of stalled construction projects located throughout New York City representing scores of potential union jobs has jumped almost 20 percent in the last year, according to a new report by the New York City Building Congress.

But as startling as the findings are, few seem prepared to explain why in a metropolis desperate for fresh housing, thousands of new units are languishing throughout the five boroughs.

"This is a continuing problem and it doesn't seem to be getting any better even as the economy and the housing market improves in the city," NYC Building Congress President Richard Anderson told LaborPress. "That's the big surprise. There are no understandable reasons. Things should be going better. Financing is beginning to come back, demand is strengthening, the economy is getting stronger, jobs are inching up – we shouldn't have this problem continuing."

Most of the construction projects that were started and then stopped – almost 75 percent – are classified as residential. Of the 270 sites found dying on the vine, 153 were identified as multi-family apartments, 93 were one- or two-family homes, and 24 were mixed use sites with street-level retail coupled with apartments.

"Most of these stalled projects are outside of Manhattan, so they're not in the luxury category," Anderson said.

So far, the major trade unions involved in building are keeping mum about the new report.

Erik Martin Dilan, chair of the New York City Council's Housing and Buildings Committee, said that he is troubled by statistics that show the explosion of stalled projects has wiped out the gains made over the prior 15 months.

"We need to find a way to get these sites up and running and finished," the councilman said. "I plan on reaching out to the mayor, the speaker and to Mr. Anderson of the Building Congress so that we can discuss pro-active ways to tackle this problem.”

Anderson's remedy calls on city government to create more tax incentives and broader rezoning initiatives.

"They've done them in the past, but the city is allergic to tax incentives," Anderson said. "They don't like to do that even though they are temporary and they only last for so many years. They really don't want to do it, and I think they have to reconsider that decision."

According to Anderson, too much of the city is zoned non-residential.

"Particularly areas zoned for manufacturing only, that might be appropriate for residential or mixed-use developments," the Building Congress leader said. "Even though this administration has pursued rezoning extensively, there's far more that can be done in that area."

Last year, 37 percent of stalled construction sites were left vacant by developers who secured land and construction permits, but didn't actually start building. This year, that number rose to 45 percent.

“This year started on an encouraging note with the number of stalled sites dipping below 600 for the first time since the Spring of 2010,” Anderson said. “But the momentum quickly reversed as 105 different sites were added to the DOB list in March, April and May, which erased all of the progress that was made in 2011. While it’s hard to pinpoint exactly what happened, it is worth noting that the upturn in stalled sites roughly coincided with a period of rather steep declines in the stock market, as well as a growing uncertainty about the state of the world economy.”

The Building Congress report found 691 stalled projects recorded throughout the city in the month of November. In February, the number was 592.

"The potential for considerable job creation and economic stimulus remains locked inside the nearly 700 sites that lay still across the five boroughs," Anderson said.

 

November 30, 2012

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